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Minnesota Legislature

Fee increases criticized

Published (2/20/2009)
By Nick Busse
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A proposal by Gov. Tim Pawlenty to increase fees on certain occupational and commercial licenses came under criticism from some members of a House division.

During a Feb. 17 hearing, members of the House Higher Education and Workforce Development Finance and Policy Division expressed skepticism about the governor’s proposal to impose a temporary surcharge on various professional and occupational licenses issued by the state.

The surcharge, which would equal the greater of $10 or 10 percent of the total license fee, would go to fund a one-stop “e-licensing” Web site for the state’s approximately 320 different kinds of professional licenses. If implemented, it is expected to raise $38 million over the next eight years.

Department of Labor and Industry Commissioner Steve Sviggum defended the plan, saying the money raised by the surcharge is necessary to fund a program that would make the state’s licensing operations more efficient.

That argument was lost on several division members, however, who questioned the logic of making workers and businesses pay more for a Web-based version of a service the state currently provides.

“Why do we have to charge the folks that are licensed at your department for doing something you obviously charge them for already?” asked division chairman Rep. Tom Rukavina (DFL-Virginia). He added that in his experience, “technology has never saved government any money.”

Rep. Rob Eastlund (R-Isanti) asked whether future savings from the switch to e-licensing would be reflected back to the license holders, for example, by reducing license fees at a later date. Sviggum replied that he had no specific numbers on how much savings would result from e-licensing.

Although the surcharge would apply to licenses issued by his department, Sviggum emphasized that the state’s Office of Enterprise Technology would actually be the agency collecting revenues from the surcharge. He urged division members to direct their questions about the proposal to the office.

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